By Hiroyuki Kachi
The dollar was nearly flat against the yen and the euro in Asia
trade Monday, with investors sitting on sidelines ahead of major
events later this week, including the Federal Open Market Committee
meeting and U.S. jobs and gross domestic product data.
The U.S. dollar was at Yen101.81 from Yen101.83 late Friday in
New York. The euro fell slightly to $1.3428 from $1.3429.
The greenback was in tight range throughout the session as
investors lacked fresh cues ahead of second-quarter U.S. GDP data
Wednesday and July jobs data Friday. Investors are keen to see how
U.S. interest rates will react to these indicators. And while
little surprise is expected from the outcome of the FOMC's two-day
meeting Wednesday, investors are looking for signs on the future
direction of monetary policy.
The dollar's advantage has become "more prominent" compared with
other currencies, said Marito Ueda, director at FX Prime Corp.
"I think it may be about time for investors to feel signs that
the dollar will gain momentum" after digesting Friday's jobs data
and confirming brisk economic performance for the summer, Mr. Ueda
said.
But it may be still premature to expect a full-fledged greenback
rise against the yen. Investors are reluctant to pour money into
riskier assets globally, keeping it flowing into U.S. Treasurys
instead, putting a lid on any strong rises in U.S. long-term
yields, he said.
"As long as there is such a picture in the market, the currency
won't likely step out of persistent range-bound trade," said Mr.
Ueda, who expects the dollar to move in a Yen101.10-Yen102.20 range
this week.
Aside from economic news from the U.S., a number of geopolitical
risks warrant continued monitoring, said Junya Tanase, chief FX
strategist at J.P. Morgan in Tokyo.
Concerns such as the possibility of additional sanctions against
Russia may send nervous investors fleeing riskier assets, causing
U.S. Treasury yields to fall. Mr. Tanase said a dollar-yen
consistent with the current U.S.-Japan yield gap is Yen101.42,
slightly lower than the current level.
In other currency trade, the euro weakened to Yen136.72 from
Yen136.77.
The WSJ Dollar Index a measure of the dollar against a basket of
major currencies, was unchanged at 73.40.
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